Learning To Speak The Language In The Land Of Personal Finance

Photo by Jes

Photo by Jes

Language Barriers

I felt like a fish out of water.

A few years ago, I traveled to the nation of Israel on a missions trip.

Yes, there were signs in English. And, yes, there were English-speaking people in Israel. But still, there was enough Hebrew, Arabic, and other European languages being spoken there that I was grasping at what I was hearing, trying to figure out important details about my journey.

The tour hosts and guides gave us some basic Hebrew words and their meanings, but that only took our little missions team so far. We were going to be there for two weeks and then fly home, so probably not very many of us took the Hebrew language very seriously.

We struggled through those language barriers as best we could and then flew back to the States. We were safely back in our English-speaking comfort zone.

What if I made a permanent move to Israel, though? What then? I don’t think faking it through the Hebrew language would do me any good. I would struggle for a very long time. I would be reliant others to translate important information.

The best step I could take would be to learn the language so that there would be no barriers between me and the Israeli people. A wise decision on my part would be to take language classes, listen to audio recording lessons, use computer software, and hire a tutor. Then, I would be completely immersed in that culture. I would not only survive, but I would thrive through knowing the language.

Financial Barriers

Just like a foreign language, personal finance has a “language” all its own.

Many people feel there are way too many barriers to this particular language, so they resort to faking it through their financial journey. They want to stick their fingers in their ears and shout “La, la, la … I can’t hear you” so they don’t have to deal with the foreign land of personal finance.

But, the land of personal finance is not a speedy, two-week trip. Whether we like it or not, our financial lives are the journey of a lifetime. We can choose to win or lose. All it takes is making the choice to win, setting goals, getting help, and learning this language called personal finance.

But, in the end, the majority of us don’t follow this path. We won’t win with our finances.

Lifetime Language Learning

Instead of fighting the language of personal finances, we need to spend a little time and money to learn this language. We need to get in a Crown Financial Bible Study. We need to buy an FPU kit and go through Dave Ramsey’s Financial Peace University. We need to read books such as The Wealthy Barber, The Automatic Millionaire, Rich Dad, Poor Dad, and The Millionaire Mind.

We should know and understand software such as Quicken, and Excel. We should utilize online banking. We should take advantage of websites such as Mint.com. We should automate our finances as much as possible. We should seek out the advice and knowledge of financial professionals.

This is not a “one and done” kind of process, either. Learning the language of personal finance especially in today’s high-tech world needs to become a lifelong learning process. The tips and tricks of finance are constantly evolving. Yes, there are some basic, foundational principles that will never change, but there will be some other important high finance approaches that will change given shifts in the economy.

We all need to embrace the language of personal finance and make the choice to win with money.

Questions: Are you afraid to learn the language of personal finance? Why or why not? What steps are you taking now to stay current in your financial journey?






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3 Ways To Run Your Personal Finances Like America’s Successful Companies

Photo by Sal Falko

Photo by Sal Falko

America’s Best And Brightest

I enjoy hearing success stories of America’s best companies.

In our current political climate which often demonizes hard work and smart business practices, I have an even greater appreciation for companies such as Coca-Cola, Apple, Google, Wal-Mart, and Berkshire Hathaway.

Even during the worst economy in decades, these companies have figured out ways to succeed. They have made intelligent financial decisions that have helped them prosper.

I wonder what would happen if we approached our personal finances like these successful companies?

What if we as individuals and families had the financial mindset, will, and tenacity to make it in a difficult economy just like these businesses? If we did, then I believe we would no longer be in a down economy!

There are some great personal finance lessons that we can all learn from these prosperous companies.

3 Ways To Run Your Finances Like Successful Companies

  1. Avoid Debt. Apple, Inc. used to be a great example of this. Apple was formerly a completely debt-free company with billions of dollars in savings. In 2013, though, they decided to go into debt for a number of different reasons which included boosting their stock price, paying out dividends to investors, and taking advantage of our current U.S. corporate tax law. The decision to go into debt was really more of a strategic tax move and not a necessity to stay afloat, financially. Long-lasting wealth is built on the avoidance of debt in any form. In our personal finances, we would be wise to follow the ways of Apple, Inc., pre-2013! Get out of debt as fast as you can and stay out forever!
  2. Pile Up Cash. In our current economic climate, more and more companies are playing it safe: Apple, GE, Yahoo, and Caterpillar, just to name a few. These companies all realize that “Cash is King,” especially in an era of uncertainty. We should have the same mindset in our personal finances. Be sure to have a “baby” emergency fund of at least $1,000 if you’re still paying off any debt. If you’re completely debt free, then you want to have at least three to six months worth of expenses in accessible, liquid cash.
  3. Focus On Revenue Streams: products, traffic, clients, sales, and money. The best U.S. companies out there today have a laser-like focus on bringing in more revenue. They realize that revenue is the life blood for their company’s survival. Click here to see the revenue strategies for three major tech companies. In the same way, we should have laser-like focus on additional streams of income for our families such as side jobs, side businesses, passive income, dividend producing investments, and real estate. I highly recommend a couple of books on this subject from Robert G. Allen: Multiple Streams of Income: How To Generate a Lifetime of Unlimited Wealth and Multiple Streams of Internet Income.

Questions: How about you? Are you running your personal finances like these successful companies? Are you avoiding debt, piling up cash, and focused on revenue streams? Why or why not?






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Do Rich People Stuff And File Your Taxes As Late As Possible

Photo by Ken Teegardin

Photo by Ken Teegardin

Tax Season Is Upon Us

It’s tax season. Yippie!

(That was a touch sarcasm if you didn’t catch the tone of my writing voice.)

I recently finished doing all my family’s tax forms. I don’t really enjoy doing my taxes, but who does? This is mainly because I’m either really close to receiving a small refund or owing a ton of money. You see, I have the awesome privilege and responsibility of paying quarterly estimated taxes due to my status as an ordained minister.

My income taxes are not deducted from my paycheck each month, and I like it this way.

(And now, I probably just painted a bullseye on myself for an IRS audit.)

What this means for me, though, is that I need to plan, budget and save accordingly, so that I can pay my federal and state quarterly estimated taxes on April 15, June 15, September 15, and January 15.

In paying my income taxes this way, I experience the financial “pain” of my taxes. Most people don’t experience this same pain due to tax withholding from each paycheck. Believe me, it’s a totally different experience. The government knows and understands this, too. They don’t want the majority of the population to feel this kind of tax pain.

For 2013, I messed up my tax calculations for a couple of different reasons. Now, I owe a substantial amount to Uncle Sam next week.

While I’m not thrilled with the thought of having to pay a substantial amount of money in addition to what I’ve already paid, I am okay with it.

And why in the world would I be okay with owing the government a bunch of money? Because I have a different tax season financial mindset than your average American.

Two Different Tax Season Mindsets

Poor and lower middle class families typically file early in the tax season.

Why do they file early? I believe this is due to the fact that poorer people tend to view tax season as an opportunity to “make money.” They have structured their withholding as such that they have been enrolled in a one-year forced money-saving program.

The funny thing, though, is that they have essentially loaned their money interest-free to the government for a whole year. They lost the opportunity of using that money for an entire year.

The poor usually have regular income from only one or two jobs. Their tax forms are relatively clean and simple. They can fill out the forms quickly and begin the process of getting their money back.

The sad reality is that the majority of Americans who receive refunds have no real strategic plan for this money once they get it back from the government. They tend to go spend it on stuff that they probably don’t even need, and then the cycle begins anew for another year.

On the other hand, wealthier individuals and families typically file as close to April 15 as possible.

So, why would rich people choose to file so close to the deadline? Probably due to the fact that they feel the pain more of paying taxes. Their tax forms are more complicated. They have a variety of income streams. They have investments. They own a small business. They have more of a producer mindset rather than a consumer one. They understand the value of every dollar they earn.

Rich people definitely experience the pain of paying taxes at a deeper level than poorer people.

And, I wonder what would happen if poorer families had to pay their taxes like wealthier families? My guess is that we would probably experience a tax revolution in this country!

Here are some thoughts on how we can all shift our financial mindsets during tax season.

5 Ways To Shift Our Tax Season Mindsets

  1. Consider tax strategy in your overall budget process. I know when I plan my monthly budget, I want the largest amount of monthly net income in order to leverage what I need leveraged in my family finances, such as debt reduction, savings, and investing.
  2. Give the government exactly what it deserves. No more and no less. Yes, we should pay our taxes. As Christians, we need to be obedient to the laws of the land. But, handing additional money over to the government for them to use interest free for a whole year is not wise stewardship.
  3. Structure tax withholding and payments for equilibrium. You don’t want to owe, but you also don’t want to receive a massive refund, either. Consider meeting with a tax advisor or financial planner to achieve this tax equilibrium.
  4. Start some type of small side business and see your taxes and tax forms become more complicated. If your business is even moderately successful, you will need to pay estimated quarterly taxes. You will now experience the pain associated with paying taxes at a new level.
  5. Create a wise financial plan for any refund money that you may receive. You might consider using the money for debt reduction, savings, or investing. Otherwise, that money is going to somehow wander into Wal-Mart and be gone forever!

Questions: What is your tax season financial mindset? Do you think more like the poor or the rich? Do you file your taxes early or as late as possible? Why or why not?






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Does God Really Want Me To Live A Life Of Financial Abundance Or Not?

Photo by DavidZ

Photo by DavidZ

Answering A Young Christian’s Financial Concerns

Is it okay to be a Christian and be rich?

Great question.

A few weeks ago, I received an email from one of my blog readers. She is new to the Christian faith and wrestling with wealth and the Christian life. You see, she lacks nothing in this life. She’s uncertain about what the Biblical response should be to the financial blessing of God.

In this post, I attempt to tackle ten questions that my blog reader asks in her email.

Before I answer these questions, take a quick scan of her email:

Hi Larry,

I recently found your blog and find it very interesting. I am a “born-again” Christian (since 2012) and found that no one wants to talk about money. Consequently, I am very thankful for your blog. I have a question and I’m wondering if you already addressed this topic:

Should I feel guilty that I do not lack anything?

I consider myself to be pretty generous. I cheerfully pay my 10% to the church and contribute to many charities. On the other hand….I do not lack anything. Sometimes, I feel guilty about the comfort that my family enjoys. Simply put, how can I justify having anything above the minimum necessity of life while thousands are dying from starvation every single day? Aren’t Christians supposed to sacrifice their “comfort” for the good of others? Isn’t true that many early Christians sold everything they had to give to the poor? How much credit do you get when you give out of abundance without experiencing sacrifice?

I recently started questioning expenses such as new clothing, new furniture, going to the movies and even family vacations! If I can’t hardly justify these, never mind considering real luxury items such as spa treatments, Botox, 10 pairs of shoes and a fancy car!

Anyone else experiencing this guilt and questioning every expense? Am I worrying too much about this? Should I forget it since after all, my contribution will not put an end to starvation? Did God want us to live a life of “sacrifices”? Is it wrong to enjoy earthly pleasures while others are dying? Is it wrong to not lack anything?

Your thoughts would be appreciated,

God bless,

Blog Reader from Alberta, Canada

A Biblical Response To Wealth

Here is my response to my reader’s specific questions based upon what I believe God teaches us through His Word. I attempt to quote a key Bible passage for each question.

  1. Should I feel guilty that I do not lack anything? To be blunt – NO! If God has chosen to bless you and your family, then I say REJOICE! Approach Him daily with a an attitude of gratitude for His financial blessings. You also mentioned that you are cheerfully tithing and giving to others. Your blessing and financial generosity should result in thanksgiving, not guilt! “Now he who supplies seed to the sower and bread for food will also supply and increase your store of seed and will enlarge the harvest of your righteousness. You will be enriched in every way so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God” (2 Corinthians 9:10-11).
  2. How can I justify having anything above the minimum necessity of life while thousands are dying from starvation every single day? There’s a Gospel story (The Alabaster Jar) found in Matthew 26 and Mark 14 when a woman (probably Mary Magdalene) took a very expensive perfume/ointment that cost an entire year’s wages and poured it all over Jesus. She anointed His body before He went to the cross. The disciples were mad about it, too. Their response was “why couldn’t this expensive ointment been sold and the money given to the poor?” Jesus’ response, “The poor you will always have with you, and you can help them any time you want. But you will not always have me.” Yes, we need to help the poor, but there will be other large financial priorities that can and will supersede poverty. We will never be able to fully eradicate it. Jesus said so, Himself. Help where you can, and then leave the rest in God’s hands.
  3. Aren’t Christians supposed to sacrifice their “comfort” for the good of others? Yes and No. It’s a slightly complicated question. God’s first priority for you after the tithe is for you to provide for your family. “Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever” (1 Timothy 5:8). Now, I do realize the passage is dealing with taking care of widows within your family so that they are not a burden on the church, but I still think there’s an overarching principle here. God gives us financial supply in order for us to provide for our families. But, if you and your spouse feel that you have way more than enough, then you could always make a decision to place a cap on your lifestyle and give the rest of your wealth away. There are no hard and fast rules here. You and your spouse just need to pray this one through and see what the Lord has called your family to do.
  4. Isn’t it true that many early Christians sold everything they had to give to the poor? You’re actually referring to the Book of Acts in this question (read Acts 2:42-47 and Acts 4:32-37). I believe this was an isolated incident in Scripture, completely based on the circumstances of the Early Church. The early church was being persecuted, and many of these young Christians were very poor. Apparently, they all threw their money together in a “communal pot” and took care of each other’s needs (not just poor people in general). Plus, these early believers thought Jesus was coming back sooner than later, so they didn’t really care about their wealth and what was going to happen to it. Unfortunately, some believers even stopped working and become idle in their lives as a result. In fact, the Apostle Paul had to chastise believers in Thessalonica about this very issue. Read 2 Thessalonians 3:6-14. As the church grew and matured, we no longer see this communal church living structure after the Book of Acts.
  5. Anyone else experiencing this guilt and questioning every expense? Many wealthy Christians struggle with these same questions as you do. You are not alone. My encouragement to you would be to embrace the struggle. That means the Holy Spirit is at work in your life. This is a great problem to have. Pray daily regarding what the Lord would have you do with your abundance.
  6. Am I worrying too much about this? Again, it’s a slightly complex problem you are dealing with, with no clear-cut answers to all of your questions. In Luke 12:25, Jesus poses the question, “Who of you by worrying can add a single hour to your life?” Instead of worrying about it, pray about these challenges and discuss them with your spouse. With God’s help, formulate a game plan for your abundance.
  7. Should I forget it since after all, my contribution will not put an end to starvation? I would say do what God has called you and your family to contribute, and then leave the rest in His hands. You can only do what you can do.
  8. Did God want us to live a life of “sacrifices?” At some level, I would say “yes.” If you have modified your lifestyle to the point where you are not spending money at the level you could based on your wealth, then I would submit that you are already living in a sacrificial state. “Sacrifice” has a different definition at different income levels. Your sacrifices won’t look like my sacrifices. This may be a horrible example, but let’s say you could financially afford and had a strong desire to buy a brand new 2014 Cadillac CTS with cash, but you have chosen to forego that purchase and buy a really nice, used, 2-year old 2012 Buck LaCrosse instead. And with the money you haven’t spent, you decide to give that to the poor. I believe then that you have lived out a sacrificial lifestyle.
  9. Is it wrong to enjoy earthly pleasures while others are dying? No. In 1 Timothy 6:17 we read, “Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.” In this one verse, the Apostle Paul mentions that God does give wealth for our enjoyment. You and your spouse may just need to set the limits on that enjoyment through prayer and insight from the Holy Spirit.
  10. Is it wrong to not lack anything? No. Nowhere in Scripture do I read that it is wrong to lack anything. As a matter a fact, I read the opposite in God’s Word, at least in the sense of lacking real world, everyday needs such as food, clothing, and shelter. In Matthew 6:31-34 Jesus tells us, “So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For the pagans run after all these things, and your heavenly Father knows that you need them. But seek first his kingdom and his righteousness, and all these things will be given to you as well. Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.”

Questions: So, what do you think? Am I on the right track regarding Christians and wealth? How would you answer this blog reader’s questions?






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Whatever You Do, Don’t Manage Your Money Like Many Professional Athletes

Photo by yoyo du 33

Photo by yoyo du 33

From Riches To Rags

Broke. Tapped Out.

Would it surprise you to know that some of the greatest athletes of the last 40+ years are now poorer than dirt?

I’m talking athletes like Mike Tyson, Johnny Unitas, Latrell Sprewell, Dorothy Hamill, Scottie Pippen, Evander Holyfield, and Michael Vick.

All of these famous, well accomplished athletes have made millions upon millions of dollars in their careers, and what do they have to show for it? Not a whole heck of a lot.

On a percentage basis, professional athletes are the WORST money managers.

I recently read the following statistics when it comes to professional athletes and money: Around 78% of NFL players and 60% of NBA players go broke within five years of leaving the field, according to a Sports Illustrated estimate made in 2009 (Source: UK Guardian).

Just look at the life of professional boxer Mike Tyson.

At the height of his career, here’s what Mike was able to accomplish. He was the undisputed heavyweight boxing champion of the world. He was the youngest man to ever win the WBC, WBA and IBF Heavyweight Titles. Finally, he was the first man to win 12 of his first 19 fights in the first round by KO. His estimated lifetime earnings range from $300-400 million.

Yes, you read that correctly, $300-400 million!

But then, the wheels came off and his life fell apart. Mike Tyson’s story reads like the Great American Tragedy: domestic violence, bad press interviews, the death of his father-figure trainer, a nasty divorce, a federal rape charge, felony possession of drugs, a DUI, and a bloody ear incident.

And, at one point after this whole mess, Tyson was worth less than $700. Now, how in the world do you go from $300 million all the way down to less than $700?

3 Ways To Go Broke Quickly As A Professional Athlete

When you investigate the lives of professional athletes who have gone from millions to bankruptcy, you can definitely see a pattern that led them down a bad financial path. If I had to pick three areas that led these athletes in the wrong direction, then here are the three I would list:

  1. Fast Living. Sex, drugs, and rock-n-roll. If you want to make millions of dollars and lose it all, then simply live fast and loose. In this way, you can lose your career faster, go to court, land your butt in jail, get divorced, and then pay millions in alimony and child support. Yeah, that’s pretty easy to do.
  2. Toy Gathering. Expensive luxury cars. Multi-million dollar homes. Massive yachts. These are the high dollar items that get many athletes in trouble. But, this is what happens though when young athletes go from financially poor to massively wealthy as soon as they sign on the dotted line of an incredible contract deal. They don’t know how to handle that kind of wealth. So, they run out and go on spending sprees. Plus, they end up spending more than they actually make on stuff that will sharply go down in value within a few short years.
  3. High Risk Investments. Getting investment advice from those people closest to you (family and friends) is always a bad idea. But, when you look at these riches-to-rags athletes, this is definitely what you observe – rich people taking investment advice from other people around them who are just plain money hungry. Bad restaurant deals are pretty typical with athletes. The restaurant business is a brutal industry and not a wise place to invest large sums of money.

Questions: Ok, so you’re not a wealthy athlete, but are you making some of the same mistakes as these athletes? Are you living a questionable lifestyle that will damage your finances at some point in the future? Are you buying a bunch of stuff that is dropping like a rock in value? Are you making any risky investments that will come back to bite you in a few years? What decisions do you need to make, today, in order to put yourself in a better financial position?






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How To Craft A Christian Personal Financial Theology

Photo by UnlockingTheBible

Photo by UnlockingTheBible

Let’s Review

In my last post Do You Have A Philosophy Or A Theology When It Comes To Personal Finances?, we explored four separate money beliefs that I believe many Christians operate their financial lives through one of these four belief systems:

  • Money Belief #1: Money is worldly and a necessary evil to survive. Let’s not discuss it.
  • Money Belief #2: Money is a taboo topic for the church world, but I recognize that money is addressed in Scripture.
  • Money Belief #3: I know what God’s Word says about money. I like my money system better. Now, leave me alone!
  • Money Belief #4: I recognize that I am God’s financial manager. I will follow His instructions.

Unfortunately, I believe many of us as Christians have never connected the dots between the whole money issue being addressed throughout the pages of Scripture and our role as money managers for God. The universal church has done a poor job of teaching and preaching what God has taught us about money through His Word.

In my last post, we also looked at the definitions of “Philosopy” and “Theology.” In simple terms, a philosophy is a life theory invented by man. Man’s theories are flawed and imperfect. A theology is a system of belief based on Scripture. If we believe that God’s Word is holy and without error, then a theological system of belief is flawless and perfect.

I believe Christians today are operating under financial beliefs invented by man, not a system of belief founded upon the Word of God.

Crafting A Christian Personal Finance Theology

Now is a great time for Christians to return to God’s ways about money. We live in a world that is severely confused on how to handle money at any level whether it’s personal finances, business finances, or government finances. This is why we’re living through such difficult financial times in recent years.

So, as Christians, how do we put together a belief system that is completely based on God’s Word? How do we craft a truly Christian personal finance theology?

Here are my thoughts on how to develop a Biblical theology of money:

  1. Be a regular reader of God’s Word. Shocking, I know. That’s rocket science right there! Seriously though, if you want to know what God has to say about money, you need to be reading through your Bible consistently. Don’t just camp out on a single book of the Bible. Don’t just read the New Testament or only the Old Testament. God’s financial belief system is sprinkled throughout the entire Biblical narrative. You can’t just read the book of Proverbs and nail down your theology of money, although that’s a great place to start.
  2. Attend a Crown Financial Bible Study and Financial Peace University. When people ask me the difference between these two small group studies, this is my response: Crown Financial is more of a true Bible study that is heavy on Scripture and truth. Financial Peace University is a practical, step-by-step financial plan based upon Biblical principles. I have done both, and I highly recommend both for a solid foundation in developing a theology of money.
  3. Google it! Again, I’m sure this is all rocket science that never even occurred to you. Type in the search bar “Bible verses about money” and you will receive 3,350,000 results! I’m looking at the search list, and I’m seeing some great pages to open up and explore.
  4. Read blogs that address personal finances from a Biblical perspective. There are many great Christian personal finance blogs out there, today. Here’s a list of the ones I’m most familiar with:
  5. Be sure to focus on these main areas in developing a Biblical theology: giving, tithing, saving, spending, debt, investing, business, contentment, planning, and stewardship. Check out this great article that addresses these issues and more: 250 Bible Verses about Money.

Questions: Have you ever gone through the process of developing a solid, Biblical theology on money? What other steps have you taken in developing your theology on personal finances?






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Do You Have A Philosophy Or A Theology When It Comes To Personal Finances?

Photo by Loan Leaders of America Inc.

Photo by Loan Leaders of America Inc.

Money Beliefs

I’ve been involved in studying and teaching the ways of personal finances now for 10 years. It’s been an interesting journey that has impacted my life in many ways; mostly good, some bad.

As I have been on this decade-long journey, it has been thought-provoking to discuss with people their own personal finance beliefs.

We all have a unique set of beliefs or philosophy about money that we arrive at in our adult lives from a variety of sources. The majority of our beliefs we tend to pick-up from our parents (we either embrace their beliefs, or go completely in the opposite direction). Other beliefs, we pick-up from friends and others closest to us. Finally, we pick-up various money beliefs from the society we live in – TV commercials, internet media, so-called financial experts, and so on.

The world’s financial philosophy says one thing. God’s financial theology usually says the exact opposite.

Here’s the weird thing, though. Those of us who name the name of Christ as our Lord and Savior tend to adopt the financial beliefs of our parents, friends, and society over what God’s Word tells us about money. Over the last decade of observing a lot of various money beliefs, I have concluded the following list of four money beliefs often held by Christians:

  • Money Belief #1: Money is worldly and a necessary evil to survive. Let’s not discuss it. Some Christians have a (false) belief that money is a carnal, worldly system that is completely separate from their faith journey. They’ve never been taught or never made the connection that God’s Word has a lot to say about money and possessions. These people may even have the belief that money is sinful and should not be part of our spiritual conversations.
  • Money Belief #2: Money is a taboo topic for the church world. Some Christians believe money is a taboo subject that should never be discussed in church, even though they do recognize that money is addressed in Scripture. I’ve had people tell me directly to my face that we need to stop discussing money in our church because it will run people off to other churches. These same people would probably be more in favor of and less embarrassed by having a sermon series on a Biblical theology of sex than a Biblical theology of money (Personal note: I find this completely bizarre, yet fascinating about our societal beliefs!).
  • Money Belief #3: I know what God’s Word says about money. I like my money system better. Now, leave me alone! Some Christians have a good head knowledge that the Bible does have a lot to say about finances. They have chosen to bury their heads in the sand on God’s money system in favor of the world’s money system. Their actions seem to say, “God, I think the world’s money system is a lot more sophisticated than Yours. Sorry, but I’m going to go along with the world’s system, because it’s better.”
  • Money Belief #4: I recognize that I am God’s financial manager. I will follow His instructions. In this final financial belief, Christians recognize that everything comes from the hand of God, and we are simply called to be good managers of everything that He has entrusted to us. This not only includes our finances, but also our time, talents, resources, and even our physical bodies. Everything we have, everything we are belongs to Him.

Defining The Terminology

So, let’s take a moment and define the terms that we’re talking about in this post.

Philosophy: a set of ideas about how to do something or how to live.

Theology: the study of religious faith, practice, and experience.

Let’s put this in even simpler terms: a philosophy is a life theory invented by man. Man’s theories are flawed and imperfect. A theology is a system of belief based on Scripture. If we believe that God’s Word is holy and without error, than a theological system of belief is flawless and perfect.

So What? Who Cares?

The big deal here for the Christian, at least in my mind, is the “why.” Why are Christians so willing to adopt a financial belief system that is flawed and imperfect when God has the very best financial plan laid out in His Word?

When we embrace His financial teachings, we avoid debt, we save money, we provide for the needs of our family, and we invest in the Kingdom of God through generous giving.

This financial lifestyle is in stark contrast to the world’s financial system.

In my next post, we’ll take a closer look at actually crafting a Christian personal finance theology based upon God’s Word.

Questions: What financial belief system are you currently operating under? An imperfect theory taught by the world, or a perfect belief system written down in God’s Word?

The Great Financial Debate: Quality vs Frugality

Photo by pjinomaha

Photo by pjinomaha

A Simple Coffee Maker Reminds Me Of The Debate

Over the holidays, I received a Keurig coffee maker for a Christmas present. I’ve secretly wanted one of these bad boys for quite a while, but I also didn’t want to spend $150 to be able to brew just one cup of coffee at a time, either.

Within a few short days of using my new coffee maker, I started thinking “where have you been all my life?” This machine brews an amazing cup of coffee! For 20+ years, I’ve made the traditional 10-12 cup pot in a drip coffee maker. I just never realized how bitter and nasty this coffee is when compared to a freshly brewed cup from a Keurig.

For those of you who are serious coffee drinkers and have done all the different types of coffee makers, then you are very much aware that the daily cost of using a Keurig is possibly twice as expensive as a traditional drip coffee maker. You can make them a bit less expensive by using the refillable plastic mesh K-cups. This is what I’ve done with great results.

As I’ve enjoyed my new coffee maker the last several weeks, I have been reminded of the continual financial debate of quality versus frugality.

Is Frugality Always The Best Option, Really?

There are so many Christian financial, frugality-mindset, well-meaning blogs out there. They teach you how to re-use plastic sandwich baggies, how to recycle old clothes, and how to clip coupons. That’s fine. I understand this line of thinking. I believe there is a place for frugality. We should live with an attitude of contentment and thanksgiving. We shouldn’t be wasteful with what God has blessed us. I’d like to think I live frugally in most areas of my life.

Here, though, is the overarching question to the entire debate: “Is being super frugal in every area of your life always the best way to go?”

For me, the simple answer is “No.” There are some instances where we probably should abandon the frugality bandwagon and step over into a quality mindset.

Several years ago, I had the same epiphany moment with Mac versus PC. Yes, the Mac is more expensive on the front end. But on the back-end, several years after purchasing my MacBook, iMac, and iPad, these computers are still running almost as well as the day I purchased them. I don’t need to constantly update virus protection software. I don’t struggle with my operating system slowing down. I no longer have computer crashes. I’ve experienced the quality but expensive better overall experience over the cheaper PC products. I’m not going back, either. Yes, I drank the Kool-Aid. Thank you, Steve Jobs.

On other items less important to me, I’m the dollar store guy. Take, for instance, clothes hangers. I have no problem picking up a ten-pack of cheap, plastic clothes hangers for a buck. No biggie for me. Here’s an instance where I will embrace frugality. Other people who are clothes hounds might scoff at dollar store, plastic clothes hangers. Because they have embraced a quality clothes mindset, they may value a better quality hanger to hang their higher quality clothing.

The Answer Isn’t Always Simple

The answer to this financial debate isn’t always as simple as you might think. It really boils down to our values and interests. If you’re a coffee fanatic, then you’re willinging to pay more for your cup of java. If you do a lot of work via technology, then you will value a higher quality, higher cost product. If you need to dress for success in your career, then you need to buy higher quality clothing.

And this is really okay, assuming we are still living out wise, Biblical financial principles. If you’re going into debt to drink high-quality coffee, to buy an new iMac each year, or to purchase expensive clothing, then we have a much bigger problem to deal with.

I typically take a quality assessment on purchases to see if it’s really worth spending the money on what I need or want. If the higher-end, quality product is worth it long-term, then I’ll save my money and pay cash for the better product.

Questions: How about you? Are you locked into the frugality mindset? Are you willing to pay a higher price on a better quality product? What’s your approach to the great debate of quality vs frugality?

7 Components For A Solid Financial Foundation

Photo by jonathanpercy

Photo by jonathanpercy

Big Buildings Require Massive Foundations

One World Trade Center, the primary building that is replacing the twin towers that were destroyed in the attacks on 9/11, has been under construction since 2004. The architectural planning started well before that.

This new 104-story super-tall skyscraper is now the tallest building in the United States and Western Hemisphere as well as the fourth-tallest skyscraper in the world by pinnacle height. Its spire reaches a symbolic height of 1,776 feet as tribute to the year of the United States Declaration of Independence. This is one massive skyscraper.

Get this, though. The foundation for this huge building took several years to complete.

The foundation for One World Trade Center is some 70 feet below street level and required dynamite blasting down into solid bedrock.

The symbolic cornerstone of One World Trade Center was laid down in a ceremony on July 4, 2004, but further construction of the tower was stalled until 2006. Then, on November 18, 2006, 400 cubic yards of concrete were poured onto the foundation of the One World Trade Center, carried by as many as 40 trucks. The first steel beam was welded on to the building’s base on December 19, 2006.

On January 9, 2007, a second set of beams was welded to the top of the first set. Later in that year, the construction company completed a row of steel columns at the perimeter of the construction site. Two tower crane bases were erected, and by the end of 2007, the tower’s footings and foundations were nearly complete [Source: Wikipedia].

Before the beautiful steel and glass structure could rise high in the New York City skyline, a solid foundation for this large of building had to be created to support it. It took a lot of time, energy, resources, and money to build it. This was a carefully executed piece of the building plan. In no way did it happen on accident.

The foundation is the most critical component for building anything of importance, including a financial plan for your family. Get this part right, and a magnificent financial legacy can be created to give financial life to your family for generations into the future.

7 Components For A Solid Financial Foundation

  1. Commit to a plan that you will build something amazing! When the City and State of New York, the developer, and the architect decided to build a new skyscraper, they just didn’t start digging a hole in the ground, lay some concrete and steel beams, and put a building up. No, they spent years creating various architectural designs, drawings, and models. They created the plan, first, before anything else took place. Then, they committed the time, energy, and resources necessary to execute an amazing plan. The same is true for a financial plan. You and your family need to spend time and energy creating a vision of what you ultimately desire before anything else takes place.
  2. Resolve that you will do rich people stuff. Assuming you desire to create an awesome financial legacy that will last several years into the future, then you need to plan the way wealthy people do. You need to do rich people stuff. Rich people make several wise financial decisions. They have cash reserves on hand for emergencies. They avoid debt. They do monthly budget planning. They ask questions like “how much?” not “how much per month?” and so on.
  3. Put your estate planning in place. None of us know when we will pass away, and it would be foolish to set this piece of planning off to the side until we have the rest of our financial plan is in place. This layer of the foundation is critical and needs to be one of the first parts completed. For the sake of your family, please, please, please, don’t delay doing this part. Hire an attorney and get a state specific will completed, signed, and notarized as soon as possible.
  4. Give strategically. Giving is a part of any healthy financial plan. As a Christian, I believe that God should automatically receive my first 10% that goes to my local church. After you have laid a solid foundation for your financial plan, then you and your family can discuss giving beyond the tithe and where that additional giving should go.
  5. Build up an emergency cash reserve. An emergency fund of 3-6 months of expense cash is your “insurance policy” of sorts that will help you through life’s financial up and downs, such as illness, accidents, unanticipated large repairs, and job layoffs.
  6. Pay off your debt ASAP. The majority of wealthy people do not do debt, especially revolving lines of credit. Commit to getting out of debt as soon as possible in order to give your family an amazing financial legacy.
  7. Invest in your retirement savings. The sooner you can begin investing in your 401(k) and Roth IRA’s, the longer these accounts will have to grow through the magic of compound interest. Get moving!

Questions: How’s you financial foundation? Are you being strategic in laying a great one? Have you even given it that much thought? Is your current foundation strong enough to create and support an amazing financial structure in the near future?

You Might Be Out Of Debt If …

Photo by StockMonkeys.com

Photo by StockMonkeys.com

I recently put this list together for a financial article for a church publication. In a Jeff Foxworthy, “You might be a redneck if ..” style, this list reflects ten results of actually getting out of debt and staying out of debt.

Enjoy!

You Might Be Out Of Debt If …

10. You no longer have too much month left at the end of your money.
9. The IRS stopped making house calls at your home.
8. You no longer receive threatening, obnoxious calls from debt collectors or attorneys.
7. You no longer get horrible headaches or ulcers due to financial stress.
6. Your car drives better now than it ever has before.
5. You have money in the bank, and it can stay in the bank.
4. You can fully fund your retirement accounts.
3. You can help pay for part of your children’s college expenses instead of them racking up major student loans.
2. You actually enjoy hanging out with your spouse and working on the family budget, together.
1. You have a greater ability to give even more to God’s Kingdom work.

Question: What have you discovered to be the greatest benefit to being debt free?